It turned out the patient had a known serious allergy to codeine and developed an anaphylactic reaction after taking the substituted drug. The court found for the plaintiff, and held both the pharmacist and the drugstore liable for damages of $130,000. There was evidence at trial that the pharmacist had called the doctor’s office, which did not give approval for the substitution!
It is estimated that three-quarters of prescriptions are filled with generic substitutes, the law and the substantial cost savings prompting formularies to offer them to an eager public. Numerous state statutes have been enacted to regulate generic substitutions, although these laws vary in important aspects, such as permissible versus mandatory (automatic) substitutions, the roles of pharmacist and prescribing doctor, and exceptions to generic drug switch.
Prescriptions drugs cost $269.2 billion in 2011, a significant portion of total national health spending of $2.7 trillion, and are expected to cost even more, according to estimates by the Centers for Medicare and Medicaid Services. Increasing use of generics should attenuate this escalating price tag. For example, a recent study of drugs in disease prevention reported that whereas blood pressure reduction with a brand-name drug would cost an estimated $53,000 per quality-adjusted life-year (QALY), this figure would drop dramatically to less than $8,000 with the use of a generic substitute (Health Aff. (Millwood) 2011;30:1351-7).
Two 2013 U.S. Supreme Court cases address additional issues surrounding generic drugs.
In Mutual Pharmaceutical Co. v. Bartlett (133 S. Ct. 2466 [2013]), the court held that a generic manufacturer cannot be held liable for inadequate warnings if its labeling faithfully tracks that of the proprietary drug – in this case, the nonsteroidal anti-inflammatory drug sulindac. Federal law forbids any deviation from the parent label, and trumps any other legal premises otherwise afforded by state tort law. It was a case that dealt with failure to adequately warn of the rare but serious complication of toxic epidermal necrolysis, which the patient developed after using a generic version of the drug.
In Federal Trade Commission v. Actavis (133 S. Ct. 2223 [2013]), the court held that “reverse payment” agreements are subject to antitrust scrutiny to ensure they are not anticompetitive. The general issue concerns vulnerable brand-name drugs about to lose their patent protection. A generic firm would place its version into the marketplace before the parent drug’s expiration date. To avoid a costly legal battle and loss of profits in the interim, the proprietary drug manufacturer would be incentivized to negotiate for a rollback of the generic drug’s release in exchange for a payout (“pay-for-delay”).
Dr. Tan is emeritus professor of medicine and former adjunct professor of law at the University of Hawaii. This article is meant to be educational and does not constitute medical, ethical, or legal advice. It is adapted from the author’s book, "Medical Malpractice: Understanding the Law, Managing the Risk" (2006). For additional information, readers may contact the author at siang@hawaii.edu.